BSkyB placates shareholders with £750m share buyback

The broadcaster's name may have been linked with some rather unpleasant goings-on, but its performance remains unshakeable, with operating profits rising to £1.1bn

by Emma Haslett
Last Updated: 25 Oct 2011
As if to add insult to injury for Rupert Murdoch, who (in case you’ve been singing loudly with your fingers in your ears for the last month) had to drop his bid for BSkyB after the phone-hacking scandal, the broadcaster has reported a staggering performance over the past year. In the 12 months to the end of June, operating profits shot up by nearly a quarter, to £1.1bn, while revenues rose by 16% to £3.3bn during the year to June 30. And to placate shareholders, who have (understandably) found the last few weeks rather unsettling (the share price has dropped by 15.7% during July), the company is buying back £750bn worth of shares – on top of a £253m dividend. Milky Bars are on them…

That the company can afford to do both of those just goes to show what stonking trade it’s been doing over the past few months – despite any reputational damage incurred thanks to its majority shareholder, News Corp. Indeed, it’s apparently gained 426,000 new subscribers, increasing its total to just over 10m, and it’s clearly been doing good work on up-selling, too: revenue per customer increased by £31 to £539, with a 37% increase in ‘triple-play’ customers – those who take pay TV, telephone and broadband. In fact, they now account for 27% of its customers – 2.8m in total. Not bad.

With figures like that, it’s no surprise, really, that the board has given its unanimous backing to James Murdoch as its chairman – despite the fact that that pesky select committee is trying to whisk him in for another grilling, after questions were raised about how much he really did know about the phone hacking going on at the News of the World.

According to the BBC’s Robert Peston, though, for all their unanimous support, the board’s confidence is likely to be limited. Apparently, one member of the board said that if ‘evidence were to emerge that damaged the credibility of Mr Murdoch (ie. the committee finds he knows more than he was letting on), then the board would have to reconsider whether he needed to stand down’. ‘In that sense, he is on probation’, added another.

Still – while young Jimmy’s reputation hangs in the balance, it doesn’t look like much can harm BSkyB commercially. The company also announced today that it has won the rights to broadcast every Formula 1 race between 2012 and 2018, while the BBC’s coverage of the sport will be halved. Great news for BSkyB – but we can’t help but wonder what’ll become of Beeb F1 presenter Jake Humphrey

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